Making Breakups a Little Better: The Benefits of Cohabitation Agreements

As the idea of the family unit evolves, many people are choosing to wait to get married until later in life, or deciding not to marry at all, and instead, choose to cohabitate with their partner. Cohabitating can be a practical and viable arrangement for some, allowing couples to combine households and share expenses. But what happens when the relationship ends? If you haven’t planned ahead, you could lose much more than just your relationship.

The Myth of Common Law Marriage

Many people have heard of the concept of “common law marriage,” or the idea that after a couple has lived together for a certain period of time, the state will view them as being legally married, without ever actually having a marriage ceremony. Common law marriage is not recognized by the state of Wisconsin. That means that if you think you have certain rights just because you’ve been living with your partner for a number of years, you could be left unprotected if the relationship ends. If you’re in a cohabitating relationship, you should consider taking proactive steps to protect yourself, your rights and your property to avoid any possible conflict or misunderstanding if the relationship is eventually dissolved.

What is a Cohabitation Agreement?

A cohabitation agreement is a negotiated agreement between two partners that can cover a number of areas of concern. Most often, the agreement will define solely-owned properties and debts of the partners and deal with how the couple’s property will be divided (if at all) upon the termination of the relationship. Some other items that can be covered in the agreement are:

Pets – The partners can agree on where the pet will live in the event of a break up, who will pay what portion of the pet’s expenses, etc.

Personal Property – A cohabitation agreement can specifically allocate pieces of personal property to each partner, as well as list items of personal property that each partner came into the relationship with, which will be retained by that partner in the event of a split.

Time for move out – If the couple agrees that one partner will keep or stay in the home the partners share, there could be a time allowance set for the other party to move out. This could be very helpful when emotions run high and allow the departing partner ample time to find a new place to live and move their property out of the shared home.

Property buyout – The parties could agree on a lump sum or formula by which one party will pay the other for an uneven property split. For instance, if one partner is going to keep the shared house, but the property is jointly titled or both parties pay on the mortgage or expenses for the house, the partners could agree that the exiting party will be paid $X within a certain number of days of moving out of the house.

Use as a Prenuptial Agreement – In the event that the couple eventually marries, they can include a provision in the cohabitation it either will remain in effect, essentially converting it to a prenuptial agreement. Conversely, the parties could agree that the cohabitation agreement will not be converted into a prenuptial agreement if they marry.

What a Cohabitation Agreement Cannot Do

If the cohabitating partners share a child or children, a cohabitation agreement cannot set the amount or waive child support. Child support is set by statute. If there has been, or currently is, domestic violence issues in the partners’ relationship, a cohabitation agreement would not be appropriate and would very likely be unenforceable in the event of a split.

How It Works

A cohabitation agreement is a logical option to consider for couples who already have or plan to reside in the same residence on a long-term basis. Each partner should have the opportunity to consult with separate attorneys who could advise that partner on his or her rights and interests and negotiate on that partner’s behalf. The partners will need to make a full financial disclosure to each other, and the agreement will need to be fair both at the time it is entered and at the time it is being enforced. Once the agreement is amenable to both partners, it will be executed and both parties should keep copies in a safe place. It would be advisable to review the agreement every couple of years or if your circumstances significantly change.

The Litigation Option

When a long-term relationship has ended and one partner feels that he or she is not receiving a fair portion of the property, court may be an option to get an equitable property settlement. This topic could fill an entirely different article, however, one should be aware that litigation can be slow, costly and unpredictable, and the best option is always preventative action.

Another alternative to litigation after the relationship ends is a negotiated agreement. With this option, the partners would still have litigation as a fallback measure if negotiation fails, but if negotiation is successful, the parties would benefit from a quicker and less costly process with a similar end result.

Conclusion

Obviously, planning for the possible end of a relationship can be very challenging, but it’s something that can be incredibly helpful if these types of decisions are discussed and agreed upon on the front end. Having a cohabitation agreement in place could very well ease that emotional transition and ensure a clean break that is fair and agreeable to both parties ahead of time. With an investment in a cohabitation agreement up front, partners could save themselves much more time, money and stress in the end.

If you are interested in meeting with one of our family law attorneys, please contact Susan M. Perry, Jessica A. Grundberg, or Jennifer O. Hemmer by clicking here, or call us at (262) 632-7541.

Disclaimer: This article is for informational purposes only and should not be relied upon in lieu of the legal advice of a qualified and licensed attorney. It should also not be taken as creating an attorney-client relationship between the reader and the author. The information above could be applied differently based on the unique facts of any given case. If you would like to consult with one of our attorneys, please contact us for details.